A 17-year, $1,000 par value zero-coupon rate bond is to be issued to yield 7 percent.

*a*. What should be the initial price of the bond? (Take the present value of $1,000 for 17 years at 7 percent, using Appendix B.)

*b*. If immediately upon issue, interest rates dropped to 6 percent, what would be the value of the zero-coupon rate bond?

*c*. If immediately upon issue, interest rates increased to 9 percent, what would be the value of the zero-coupon rate bond?

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- what is the "intial price of bond" fromula .....
- athenabryant4
- Apr 04, 2018 at 9:18pm

- is it PV (Rate x 17x0x1000)??
- athenabryant4
- Apr 04, 2018 at 9:19pm

- Initial Price of the Bond = PV(Rate,Nper,PMT,FV)
- mokech
- Apr 04, 2018 at 9:23pm